PCCI bucks import pre-shipment inspection

MANILA, Philippines - The Philippine Chamber of Commerce and Industry (PCCI) is bucking a proposal to legislate inspection of imports by a third-party inspector prior to export to the Philippines, saying such moves will be a backward step from strategic trade facilitation measures under international trade protocols.

In a letter sent to Senate Ways and Means Committee chairman Edgardo Angara, the country’s largest business organization urged the government to adopt trade-facilitating mechanisms instead of pre-shipment inspection to combat smuggling, safeguard legitimate regulatory objectives and protect import revenues.

 “Customs being a key element of international trade, and international trade being a strategic economic development tool, modernizing customs procedures and standards must be made competitive, consistent with international trade facilitation measures and supportive of business growth and expansion,” the PCCI said.

“At a time when we are supposed to be streamlining and reducing processes in line with our international trade commitments, we will only be adding more layers in the importation process with pre-shipment inspection,” the group added.

The PCCI doubts the efficiency of a pre-inspection scheme, citing concerns such as to how it will operate as well as who will conduct the inspection and where the inspection will be conducted.

The pre-inspection scheme, also known as the load port survey and the advanced import clearance system, aims to protect import revenues for government and prevent sub-standard goods from entering the country.

The PCCI is recommending the government to adopt a risk management system and an authorized economic operator system, as well as modernize customs administration through the use of information communications technology and non-intrusive technology, and x-ray machines already purchased to ensure the integrity of cargoes.

“We believe it is high time the country modernizes its Tariff and Customs Code to align our customs administration, systems and procedures with standards prescribed by international protocols,” the PCCI said.

Aside from customs modernization concerns, the PCCI is also urging the creation by the government of a technical working group to determine the basis for including 41 additional chemicals commonly used in manufacturing as controlled chemicals listed under Philippine National Police (PNP) Memorandum Circular 2012-009.

The PCCI said it has already asked the PNP to extend the expiration of temporary licenses issued to private companies allowing purchasing, owning, storing, and transporting of controlled chemicals by another three months to Jan. 31 next year.

According to the business group, implementation of the memorandum has been hurting local industries which use large quantities of the chemicals in their production line.

The circular issued by the PNP firearms and explosives office directs companies to secure separate licenses to purchase, unload, move and possess controlled chemicals, undergo plant or factory inspections by the PNP, and obtain PNP escort to move these chemicals within the country.

The PCCI said among these chemicals are those used by the electronics and handicraft sectors such as hydrochloric/muriatic acid, hydrogen peroxide, lacquer, thinner, adhesives, glues, pastes, mineral spirits and nitric acids.                       

“With the stringent regulation on importation, sale and purchase, supply has run short. Whatever is sold in the market has marked up more than 100 per cent than when supply was stable,” the PCCI said.

The tedious processing of permits has resulted to delays in production and unmet deliveries, the business group added.          

“Coupled with un-receipted charges arising from escort and transport fees, affected companies have been incurring substantial financial losses,” the PCCI said.           

“The expiration of the temporary permits looming, legitimate companies still waiting for their regular permits to be processed run the risk of closure lest they be charged with illegal possession of contraband,” the organization added.